St Jude Medical Inc said it was initiating a quarterly dividend payout to shareholders, citing confidence in its growth outlook and financial position.

The initial quarterly dividend of 21 cents per share will be paid on April 29, to stockholders of record at the close of business on March 31.

On an annual basis, the payout represents a dividend yield of 1.75 percent, based on Friday's closing stock price.

St Jude Chief Executive Daniel Starks said the company has reached a scale where it can return value to shareholders through a dividend while continuing to invest in research, share repurchases and acquisitions.

Last week, health insurer WellPoint Inc announced it would begin paying a dividend to return some of its profit to shareholders, following similar moves by UnitedHealth Group Inc and Aetna Inc in recent days.

It is a trend across more health-care companies. St Jude has strong cash flow and they are under-leveraged, so they have the ability to do it, said Jeff Jonas, a portfolio manager at Gabelli Health and Wellness Trust Mutual Fund, which holds St Jude shares.

Some medical device makers including Medtronic Inc and Stryker Corp have raised their payouts. JPMorgan analyst Mike Weinstein noted St Jude's payout ratio will be comparable to Medtronic's at about 27 percent to 28 percent. Medtronic's quarterly dividend is $0.225.

St Jude's shares slid about 20 cents to $47.82 in late morning trading on the New York Stock Exchange.

(Reporting by Lewis Krauskopf and Susan Kelly, editing by Gerald E. McCormick and Maureen Bavdek)